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Securities
 3 Months Ended
Sep. 30, 2024
Securities [Abstract]  
Securities
(3)          Securities

The following tables summarize the amortized cost and fair value of securities available-for-sale by major type:

    At September 30, 2024      
(In thousands)
  
Amortized
cost (1)
    
Unrealized
gains
    
Unrealized
losses
     Fair value  
U.S. Treasury securities
  
$
43,072
    
$
1
    
$
1,264
    
$
41,809
  
U.S. government sponsored enterprises
    
13,039
      
-
      
1,543
      
11,496
  
State and political subdivisions
    
179,586
      
1,677
      
-
      
181,263
  
Mortgage-backed securities-residential
    
38,866
      
335
      
2,913
      
36,288
  
Mortgage-backed securities-multi-family
    
89,168
      
-
      
14,193
      
74,975
  
Corporate debt securities
    
19,372
      
92
      
769
      
18,695
  
Total securities available-for-sale
   $
383,103
     $
2,105
     $
20,682
     $
364,526
  

  At June 30, 2024  
(In thousands)
  
Amortized
cost (1)
    
Unrealized
gains
   
Unrealized
losses
     Fair value  
U.S. Treasury securities
  
$
43,024
    
$
-
    
$
1,829
    
$
41,195
  
U.S. government sponsored enterprises     13,042       -       2,068       10,974  
State and political subdivisions
    
169,842
      
828
      
1
      
170,669
  
Mortgage-backed securities-residential
    
40,402
      
67
      
3,894
      
36,575
  
Mortgage-backed securities-multi-family
    
90,261
      
-
      
17,961
      
72,300
  
Corporate debt securities
    
19,608
      
15
      
1,335
      
18,288
  
Total securities available-for-sale
   $
376,179
     $
910
     $
27,088
     $
350,001
  


(1)
Amortized cost excludes accrued interest receivable of $3.6 million and $4.0 million at September 30, 2024 and June 30, 2024, respectively, which is included in accrued interest receivable in the consolidated statement of financial condition.

There was no allowance for credit losses on securities available-for-sale at the quarter ended September 30, 2024 and June 30, 2024.

The following tables summarize the amortized cost, fair value, and allowance for credit loss on securities held-to-maturity by major type:


   At September 30, 2024      
 
(In thousands)
  
Amortized
cost (1)
    
Unrealized
gains
    
Unrealized
losses
     Fair value     Allowance
    
Net carrying
value
  
U.S. Treasury securities
   $
23,803
     $
-
     $
1,146
     $
22,657
     $ -     $ 23,803  
State and political subdivisions
    
451,322
      
9,720
      
29,377
      
431,665
       42       451,280  
Mortgage-backed securities-residential
    
59,045
      
488
      
2,196
      
57,337
       -       59,045  
Mortgage-backed securities-multi-family
    
142,867
      
-
      
12,694
      
130,173
       -       142,867  
Corporate debt securities
    
25,318
      
48
      
2,354
      
23,012
       423       24,895  
Other securities
     30       -       -       30       1       29  
Total securities held-to-maturity
  
$
702,385
    
$
10,256
    
$
47,767
    
$
664,874
     $
 466     $
 701,919  


  At June 30, 2024
  
(In thousands)
  
Amortized
cost (1)
    
Unrealized
gains
    
Unrealized
losses
     Fair value     Allowance
    
Net carrying
value
  
U.S. Treasury securities
   $
23,785
     $
-
     $
1,749
     $
22,036
     $ -     $ 23,785  
State and political subdivisions
    
450,343
      
4,541
      
40,235
      
414,649
       44       450,299  
Mortgage-backed securities-residential
    
48,033
      
51
      
3,314
      
44,770
       -       48,033  
Mortgage-backed securities-multi-family
    
143,363
      
-
      
17,397
      
125,966
       -       143,363  
Corporate debt securities
    
25,282
      
12
      
2,505
      
22,789
       438       24,844  
Other securities
     31       -       -       31       1       30  
Total securities held-to-maturity
  
$
690,837
    
$
4,604
    
$
65,200
    
$
630,241
     $
 483     $
 690,354  


(1)
Amortized cost excludes accrued interest receivable of $4.8 million and $4.1 million at September 30, 2024 and June 30, 2024, respectively, which is included in accrued interest receivable in the consolidated statement of financial condition.

U.S. Treasury and mortgage-backed securities are issued by U.S. government entities and agencies. These securities are either explicitly and/or implicitly guaranteed by the U.S. government as to timely repayment of principal and interest, are highly rated by major rating agencies, and have a long history of zero credit losses. Therefore, the Company determined a zero credit loss assumption, and did not calculate or record an allowance for credit loss for these securities. An allowance for credit losses on investment securities held-to-maturity has been recorded for certain municipal securities issued by state and political subdivisions and corporate debt securities to account for expected lifetime credit loss using the CECL methodology.

The Company’s current policies generally limit securities investments to U.S. government and securities of government sponsored enterprises, federal funds sold, municipal bonds, corporate debt obligations, subordinated debt of banks and certain mutual funds.  In addition, the Company’s policies permit investments in mortgage-backed securities, including securities issued and guaranteed by Fannie Mae, Freddie Mac, and GNMA, and collateralized mortgage obligations issued by these entities. As of September 30, 2024, all mortgage-backed securities including collateralized mortgage obligations were securities of government sponsored enterprises, no private-label mortgage-backed securities or collateralized mortgage obligations were held in the securities portfolio. The Company’s investments in state and political subdivisions securities generally are municipal obligations that are general obligations supported by the general taxing authority of the issuer, and in some cases are insured. The obligations issued by school districts are supported by state aid. Primarily, these investments are issued by municipalities within New York State.

The Company’s current securities investment strategy utilizes a risk management approach of diversified investing among three categories: short-, intermediate- and long-term. The emphasis of this approach is to increase overall investment securities yields while managing interest rate risk. The Company will only invest in high quality securities as determined by management’s analysis at the time of purchase. The Company generally does not engage in any balance sheet derivative or hedging investment transactions, such as balance sheet interest rate swaps or caps.
The following table summarizes the activity in the allowance for credit losses on securities held-to-maturity:


 
For the three months ended September 30,
  
(In thousands)
  2024     2023  
Balance beginning of period
   $ 483    
$
-
  
Adoption of ASU 2016-13 (CECL) on July 1, 2023
     -      
503
  
Benefit for credit losses
     (17 )    
(5
)
Balance end of period
   $ 466    
$
498
  

The following table shows fair value and gross unrealized losses, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2024.

   
Less than 12 months
    
More than 12 months
    
Total
  
(In thousands, except number of securities)
  
Fair
value
    
Unrealized
losses
    
Number
of
securities
    
Fair
value
    
Unrealized
losses
    
Number
of
securities
    
Fair
value
    
Unrealized
losses
    
Number
of
securities
  
Securities available-for-sale:
                                                      
U.S. Treasury securities
  
$
24,679
    
$
187
      
1
    
$
16,892
    
$
1,077
      
7
    
$
41,571
    
$
1,264
      
8
  
U.S. government sponsored enterprises
    
-
      
-
      
-
      
11,496
      
1,543
      
5
      
11,496
      
1,543
      
5
  
State and political subdivisions
     -       -       -       63       -       1       63       -       1  
Mortgage-backed securities-residential
    
-
      
-
      
-
      
22,911
      
2,913
      
22
      
22,911
      
2,913
      
22
  
Mortgage-backed securities-multi-family
    
-
      
-
      
-
      
74,975
      
14,193
      
30
      
74,975
      
14,193
      
30
  
Corporate debt securities
     -       -       -       16,685       769       15       16,685       769       15  
Total securities available-for-sale
    
24,679
      
187
      
1
      
143,022
      
20,495
      
80
      
167,701
      
20,682
      
81
  
Securities held-to-maturity:
                                                                        
U.S. Treasury securities
     -       -       -       22,657       1,146       6       22,657       1,146       6  
State and political subdivisions
    
880
      
2
      
12
      
254,810
      
29,375
      
1,680
      
255,690
      
29,377
      
1,692
  
Mortgage-backed securities-residential
    
6,784
      
10
      
2
      
29,561
      
2,186
      
27
      
36,345
      
2,196
      
29
  
Mortgage-backed securities-multi-family
    
-
      
-
      
-
      
130,173
      
12,694
      
42
      
130,173
      
12,694
      
42
  
Corporate debt securities
    
491
      
10
      
1
      
20,474
      
2,344
      
51
      
20,965
      
2,354
      
52
  
Total securities held-to-maturity
    
8,155
      
22
      
15
      
457,675
      
47,745
      
1,806
      
465,830
      
47,767
      
1,821
  
Total securities
  
$
32,834
    
$
209
      
16
    
$
600,697
    
$
68,240
      
1,886
    
$
633,531
    
$
68,449
      
1,902
  

The following table shows fair value and gross unrealized losses, aggregated by security category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2024.

   
Less than 12 months
    
More than 12 months
    
Total
  
(In thousands, except number of securities)
  
Fair
value
    
Unrealized
losses
    
Number
of
securities
    
Fair
value
    
Unrealized
losses
    
Number
of
securities
    
Fair
value
    
Unrealized
losses
    
Number
of
securities
  
Securities available-for-sale:
                                                      
U.S. Treasury securities
   $ 24,574     $ 215       1
     $ 16,621     $ 1,614       8
     $ 41,195     $ 1,829       9
  
U.S. government sponsored enterprises
     -       -       -       10,974       2,068       5       10,974       2,068       5  
State and political subdivisions
     -       -       -       62       1       1       62       1       1  
Mortgage-backed securities-residential
     1,913       8       2       22,700       3,886       23       24,613       3,894       25  
Mortgage-backed securities-multi-family
     -      
-
      
-
      
72,300
      
17,961
      
31
      
72,300
      
17,961
      
31
  
Corporate debt securities
     -      
-
      
-
      
16,360
      
1,335
      
16
      
16,360
      
1,335
      
16
  
Total securities available-for-sale
     26,487      
223
      
3
      
139,017
      
26,865
      
84
      
165,504
      
27,088
      
87
  
Securities held-to-maturity:
                                                                        
U.S. Treasury securities
     -      
-
      
-
      
22,036
      
1,749
      
7
      
22,036
      
1,749
      
7
  
State and political subdivisions
     32,215       474       294       278,521       39,761       2,025       310,736       40,235       2,319  
Mortgage-backed securities-residential
     -      
-
      
-
      
29,510
      
3,314
      
28
      
29,510
      
3,314
      
28
  
Mortgage-backed securities-multi-family
     -      
-
      
-
      
125,966
      
17,397
      
47
      
125,966
      
17,397
      
47
  
Corporate debt securities
     -      
-
      
-
      
20,276
      
2,505
      
41
      
20,276
      
2,505
      
41
  
Total securities held-to-maturity
     32,215      
474
      
294
      
476,309
      
64,726
      
2,148
      
508,524
      
65,200
      
2,442
  
Total securities
   $ 58,702    
$
697
    

297
    
$
615,326
    
$
91,591
    

2,232
    
$
674,028
    
$
92,288
    

2,529
  

There were no transfers of securities available-for-sale to held-to-maturity during the three months ended September 30, 2024 or 2023. During the three months ended September 30, 2024 and 2023, there were no sales of securities and no gains or losses were recognized.

The estimated fair values of debt securities at September 30, 2024, by contractual maturity are shown below. Expected maturities may differ from contractual maturities, because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

(In thousands)
Securities available-for-sale
  
Amortized cost
    
Fair value
  
Within one year
  
$
204,759
    
$
206,235
  
After one year through five years
    
39,893
      
38,034
  
After five years through ten years
    
10,417
      
8,994
  
After ten years
    
-
      
-
  
Total securities available-for-sale
   
255,069
      
253,263
  
Mortgage-backed securities
    
128,034
      
111,263
  
Total securities available-for-sale
    
383,103
      
364,526
  
                 
Securities held-to-maturity
                
Within one year
    
56,727
      
56,670
  
After one year through five years
    
158,641
      
158,500
  
After five years through ten years
    
175,918
      
163,847
  
After ten years
    
109,187
      
98,347
  
Total securities held-to-maturity
    
500,473
      
477,364
  
Mortgage-backed securities
    
201,912
      
187,510
  
Total securities held-to-maturity
    
702,385
      
664,874
  
Total securities
  
$
1,085,488
    
$
1,029,400
  

At September 30, 2024 and June 30, 2024, securities with an aggregate fair value of $941.5 million and $894.5 million, respectively, were pledged as collateral for deposits in excess of FDIC insurance limits for various municipalities placing deposits with the Commercial Bank. At September 30, 2024 and June 30, 2024, securities with an aggregate fair value of $41.3 million and $40.0 million, respectively, were pledged as collateral for potential borrowings at the Federal Reserve Bank discount window and the Bank Term Funding Program. The Company did not participate in any securities lending programs during the three months ended September 30, 2024 or 2023.

Federal Home Loan Bank Stock

Federal law requires a member institution of the Federal Home Loan Bank (“FHLB”) system to hold stock of its district FHLB according to a predetermined formula. This stock is restricted in that it can only be sold to the FHLB or to another member institution, and all sales of FHLB stock must be at par. As a result of these restrictions, FHLB stock is carried at cost. FHLB stock is held as a long-term investment and its value is determined based on the ultimate recoverability of the par value. Estimated credit loss of this investment is evaluated quarterly and is a matter of judgment that reflects management’s view of the FHLB’s long-term performance, which includes factors such as the following: its operating performance; the severity and duration of declines in the fair value of its net assets related to its capital stock amount; its commitment to make payments required by law or regulation and the level of such payments in relation to its operating performance; the impact of legislative and regulatory changes on the FHLB, and accordingly, on the members of the FHLB; and its liquidity and funding position. After evaluating these considerations, the Company concluded that the par value of its investment in FHLB stock will be recovered and, therefore, no credit loss was recorded during the three months ended September 30, 2024 or 2023.